When Iceland can generate a product using fewer labor hours and resources than the United States, an economist would say that Iceland had
a. a comparative advantage in production of the product.
b. an absolute advantage in production of the product.
c. a higher opportunity cost of producing the product.
d. no incentive to import the product, regardless of the cost-price conditions for other products.
Answer: b. an absolute advantage in production of the product.
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Firm X owns both a grocery store and the parking lot outside the grocery store. In order to increase the traffic at the store, the store should
a. Decrease the prices on the goods sold in the store b. Increase the parking rates c. All of the above d. None of the above
Graphically, a firm's total cost is equal to the area of the:
a. triangle formed under the demand curve. b. rectangle formed under the demand curve at a given price and quantity combination. c. rectangle formed under the average-total-cost curve at a given ATC and quantity combination. d. triangle formed by a line segment between the demand and average-total-cost curves. e. triangle formed by a line segment between the horizontal axis and the average-total-cost curves.